VA Home Loans: Affordable options for would-be, new, and existing homeowners.
VA-backed loans provide qualifying borrowers with a unique, and valuable, option regarding financing (or refinancing) home loans. The VA doesn’t provide the loans itself, but instead provides a documented guaranty of the loan so that if the borrower defaults – the lender will recover a portion of the debt. This guaranty allows lenders more comfort and certainty, and in turn normally eases the requirements the lender may have for a borrower (less-or-no down payment, lower credit score targets, etc.).
VA-backed loans can be used to purchase a property, refinance an existing loan (either for cash-out or better loan terms), and in some cases modify or make improvements on a property. VA home loans offer lenders a greater degree of comfort – resulting in loan terms that are competitive and, generally, more favorable than one may obtain without federal backing.
So, how does a servicemember or veteran confirm if they qualify and obtain documentation of this fact? There are a few ways. A VA Form 26-1880 is the most traditional option. The form is completed and mailed to the address on the form’s top, right-hand corner. Alternatively – a veteran can have their private lender obtain documentation from the VA for them. While this is certainly more convenient (and many lenders will provide this service for you) – it limits the borrower’s ability to ‘shop around.’
Important points to remember:
-Generally it is best to request figures/quotes from multiple lenders in the hopes of finding the best possible terms.
-Always keep in mind that many figures provided in quotes are estimates, and may end up slightly higher or lower in the finalized loan.
-Follow up with the VA and the lender whenever documentation is requested or required. Make certain everything you submit is received and updated in a timely manner. Both the lender and the VA should stay on top of such matters, but it is always best to follow up and be certain.